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Title Precocious Albion: a new interpretation of the British industrial revolution

Authors(s) Kelly, Morgan; Mokyr, Joel; Ó Gráda, Cormac

Publication date 2013-09

Series UCD Centre for Economic Research Working Paper Series; WP13/11

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UCD CENTRE FOR ECONOMIC RESEARCH

WORKING PAPER SERIES

2013

Precocious Albion: a New Interpretation of

the British Industrial Revolution

Morgan Kelly and Cormac Ó Gráda, University College Dublin and

Joel Mokyr, Northwestern University

WP13/11

September 2013

UCD SCHOOL OF ECONOMICS UNIVERSITY COLLEGE DUBLIN

BELFIELD DUBLIN 4

Precocious Albion: a New Interpretation of

the British Industrial Revolution.

Prepared for Annual Reviews of Economics, July 2013

Morgan Kelly,Department of Economics University College, Dublin, email: Morgan Kelly <Morgan.Kelly@ucd.ie>

Joel MokyrDepartments of Economics and HistoryNorthwestern University, Evanston, IL 60208email: j-mokyr@northwestern.edu

Cormac Ó Gráda Department of Economics University College Dublinemail: Cormac O Grada <cormac.ograda@ucd.ie>

1

Introduction

Why was Britain the cradle of the Industrial Revolution? The literature on the topic is quitesubstantial, and very little of a consensus has been reached since the survey in Mokyr (1999). Thedominant schools are divided between those who focus on geographic endowments (such as coal),those who focus on politics and institutions (including the Glorious Revolution), and those whostress Empire and Britain’s colonial successes.

In what follows we present an argument that focuses on the quality of the British labor force.While in the past claims for human capital as an explanation of Britain’s leadership have beendismissed because of its mediocre schooling and literacy rates (Mitch, 1998), we argue that thisfocuses on the wrong variables. Instead, we highlight two very different dimensions of humancapital. One is the physical condition of the average British worker. We will argue that betternutrition made British males grew up on average to be healthier and taller than their continentalcounterparts. Health and height meant both more physical strength and in all likelihood highercognitive ability, and hence higher labor productivity. As nutrition was costly, better health can beseen as investment by parents in their children’s human capital. The other is that the distribution ofability and dexterity in Britain was more skewed, so that there was a much larger density in the righttail, that is, a relatively large contingent of highly-skilled and capable technical workers. Thatcontingent may have contained a higher endowment of skills, through a more flexible and effectivesystem of training young men in the apprenticeship system, but what counted above all was its highlyskilled mechanics and engineers, who may not have been a large proportion of the labor force.

The net result is that on the eve of the Industrial Revolution, while Britain may have hadmore accessible coal and a larger overseas empire, the main reason for its precocity was its higherlevel of human capital. We do not dismiss other explanations, such as institutions. The contrastbetween institutions and human capital suggested by Glaeser et al. (2004) only exists if we employa very narrow definition of institutions. If we include a wider definition of both formal and informalinstitutions, as well as distributional arrangements such as the Poor Law, we will show how in factpart of the comparatively high level of human capital was rooted in Britain’s institutions.

Induced Innovation and the Industrial Revolution

An obvious implication of a higher productivity of British workers is that the observed wagelevel in Britain was higher than elsewhere. Robert Allen (2009a, 2009b, 2010), ), the leadingcollector and organizer of the wage data on which this observation is based, has suggested that thehigher wages themselves may have been instrumental in bringing about the Industrial Revolution.

2

Allen (2009, pp. 52-56, 143) recognizes the difference in human capital levels between Britain and the rest of1

the Continent, but does not explore the implications for his interpretation.

One implication of Acemoglu’s model is that, because of the growth in the supply of unskilled labor in Britain2

(migrants, as well as women and children), technological progress might have been what he calls “skill-replacing.” But

while the machines may have in some cases (especially in textiles) have done that, it also increased the demand for very

highly specialized skilled labor that could build, install, and maintain the new equipment. An increase in the supply of

skills, he shows, can under certain conditions actually increase its price (that is, the skill premium). Elsewhere,

Allen has resuscitated the idea of induced innovation and re-introduced it into the literatureof the origins of the Industrial Revolution. The argument builds upon the literature that flourishedin economic history in the 1960s on the effects of high wages on labor-saving innovation. Hesubmits that the British Industrial Revolution was driven by a set of labor-saving and coal-usinginnovations, stimulated by the high cost ratio of labor to energy in Britain, relative to France (whichis taken to be representative of the rest of Europe). The high level of British wages is attributed byAllen primarily to labor demand: the growing commercial and maritime sector and the growth ofurban centers raised real wages in Britain, as it did elsewhere. This argument has obviously resonatedwith other scholars. For instance, Jean-Laurent Rosenthal and Bin Wong (2011) adopt it wholesalein their account of the difference between nineteenth-century technological progress in China andBritain.

The induced innovation argument has a venerable pedigree in economic history as anexplanation of why technological progress differed across economies. In the early stages of thisliterature, it was applied to explain the difference between American and British technology, withBritain cast in the role of the low wage economy (Rothbarth, 1946; Habakkuk,1962; Temin 1966,1971). Paul David (1975) attempted to resolve the issue of substitution vs. technological progressand proposed a model that resembles Allen’s framework. He assumes that innovation was mostly“local” (that is, the product of learning by doing), and that this learning was faster in the moremechanized techniques. If that was the case, the choice among existing techniques (substitution) willhave driven high-wage economies to choose labor-saving techniques, and these willhave generatedfurther innovation in the neighborhood of high capital/labor ratios, leading to falling costs in thosetechniques. Eventually the unit costs of the mechanized techniques became so low that even therelatively low wage economies will have mechanized, and thus the British Industrial Revolutionspread to the Continent. In Allen’s view, this model describes, roughly speaking, the history of theIndustrial Revolution in Europe, although he is willing to leave some room to exogenous factorssuch as the Enlightenment and the Scientific Revolution.1

In more recent years , Daron Acemoglu (2001, 2002, and 2010) has shed further light on theeconomics of induced innovation (Acemoglu, 2001, 2002, 2010). His research has recast theliterature in terms consistent with endogenous growth, by postulating that innovation is broughtabout by profit-maximizing individuals or firms, who then become monopolistic sellers of the newtechnique or good. These models provide a more rigorous foundation for the induced innovationliterature, but in the final analysis this work has not helped cast much light on the role of high wagesin the British Industrial Revolution. All the same, in some historical situations, it has been shown2

3

Acemoglu (2010) specifically mentions the Habakkuk and Allen work as examples of labor saving technological change

that might have been induced by labor scarcity. He concludes (2010, p. 1071) that “whether labor scarcity and high wages

may induce innovation and technology adoption in practice is an open empirical question and is likely to depend on the

specific application.” Furthermore, in Acemoglu’s model biased technological progress is triggered, if at all, by a rise

in wages (not a high level). There is little evidence that wages actually rose sharply before the Industrial Revolution, and

after 1750 the growth in labor supply due to the acceleration in population growth makes this quite unlikely.

that when there is a strong unanticipated supply shock to factor prices, induced innovation can helpto bring about adjustment. Good examples of such a phenomenon are the contributions of WalkerHanlon (2013) on the British response to the Cotton Famine and that of Richard Hornbeck andSuresh Naidu (2012) on technological response to the Mississippi Floods of 1927.

As an explanation for the British Industrial Revolution, an argument based on high wagelevels relative to other economies needs to make strong assumptions, , the most basic one being thathigher British wages entailed higher unit labor costs for British employers. As we will show below,it is far from clear that this assumption was met during the British Industrial Revolution. This ishardly a new idea. It was noted in a passage by Arthur Young commenting on the low cost of Frenchlabor: “labour is generally in reality the cheapest where it is nominally the dearest. The quality of thework, the skill and dexterity of performance come largely into account” (Young, 1790, p. 311). In1824 Thomas Malthus made the same point: “Generally, my opinion is, that the efficiency of labourin France is less than in England, and that that is one of the principle causes why the money priceof labour is lower in France than in England” (Great Britain, 1824, p. 600).

A number of other possible objections to the argument have been raised. For one thing, Allenfocuses on process innovation (much of it focused on the textile industry), in which unit costs werereduced through mechanization. While this is an apt description of some of the innovations weassociate with the Industrial Revolution, we must keep in mind that new techniques were emergingalong a broad front of production, and that many are hard to classify as either labor- or capital saving,as they involve entirely new or vastly improved products or services, from canned food to marinechronometers to vaccination. It also must be shown that the London male wages relied upon by Allenare representative of what textile mill owners expected to pay their workers (something stronglyobjected to by Jane Humphries, 2013). It should also be stressed that Allen focuses primarily on theBritish cotton industry, by all accounts one of the most dynamic industries of the IndustrialRevolution and often associated with it. Yet Mokyr and Ralf Meisenzahl (2012) demonstrate thatin many respects the inventive processes in the cotton industry were atypical, and that in most otherindustries, such as engineering, the incentives and backgrounds of inventors were quite different.Hence cotton was in some sense an outlier in the Industrial Revolution. Equally worrisome for hisargument is that he must show that the new capital-intensive techniques were profitable for Britainbut that for a long period they could not be used in France because of its cheaper labor. At least oneinvestigation has shown that even for the cotton industry, the story may be problematic. UgoGragnolati, Daniele Moschella, and Emmanuele Pugliese (2011) demonstrate that on Allens’s ownnumbers, the jenny, while more profitable in Britain than in France, would under reasonable

4

Even in textiles, anecdotal evidence that high wages and cheap coal were the prime mover in mechanization3

is mixed. Arthur Young reported in 1807 from Witney (Oxfordshire) that it was a low-wage area, suffering from “the

want of vicinity to coal” — yet it had introduced spinning jennies and “spring looms” (flying shuttles). The labor-saving

innovations did not help raise local wages and most of the local poor were denied a share in the increasing prosperity

(Young, 1807, p. 326).

assumption also been profitable in France from the onset (for a similar view, see Charles Foster andEric L. Jones, 2013, pp. 103-04). 3

Moreover, Allen focuses on the high cost of labor relative to the cost of energy. This isperfectly reasonable, given that in many of the British industrializing areas coal was abundant andcheap. It should be kept in mind, however, that steam power, the paradigmatic technology in whichfossil energy supposedly replaced labor, was often used to replace horses or watermills. Thisindicates that the Industrial Revolution, rather than simply substituting resources for labor, replacedone form of resources by another. It is telling that in Cornwall, where coal was expensive, its highcost did not slow down technological progress, but simply re-oriented it into another direction.Indeed, the high cost of coal has been cited as the stimulus for the development of fuel-savingtechnology in Cornwall (Nuvolari and Verspagen, 2009, pp. 686-87). The success of Cornishengineers such as Arthur Woolf in developing fuel-saving engines wherever coal was expensivesuggests that what was driving technological progress was something deeper and stronger than cheapcoal and high wages, although the latter were affecting the direction into which innovation moved.Coal was important, but it was itself subject to technological progress, and its cost and availabilitywere clearly endogenous to deeper forces. As E.L. Jones (2012, p. 7) remarks, “industry was growingin the North before any significant generation of power using coal, while trades vital forinventiveness — notably clock and watchmakers in South Lancashire — used little fuel.”

Finally, it may be added that the evidence for technological progress during the IndustrialRevolution being on the whole labor-saving, as the induced innovation hypothesis would contend,is mixed at best. The macroeconomic record, questionable as the data are, is summarized by vonTunzelmann (1994, pp. 289-91). Apart from a short period during the Napoleonic Wars, he foundlittle evidence that technological change in Britain as a whole was on balance labor-saving before1830. Even after that year, in his view, when there was a clear-cut shift toward more labor-savingmachinery, it was dampened by "the continuing labour-surplus of males" (ibid., p. 291). Themicroeconomic evidence from the patent records, assembled by Christine MacLeod (1988), isequally troubling for the labor-saving inventions hypothesis. She calculates that labor saving was astated goal of patentees in only 4.2 percent of all patents taken out between 1660 and 1800, whereascapital saving was the goal in 30.8 percent of all patents. Looking at what patents actually achieved,only 21 percent of all inventions can be said to have saved labor, compared to the 30.8 percent thatwere said to save on capital (MacLeod, 1988, pp. 160-71).

In what follows, we will show that there is good reason to believe that there were far-reachingdifferences in the quality of labor between Britain and France on the eve of the Industrial Revolutionthat all point in the direction of British workers being more productive than their French colleagues.High wages were little more than a symptom of much deeper differences between Britain and the

5

rest of Europe. The very factors that made Britain’s workers more productive may well have alsobeen important in generating the inventions, and (equally important), in disseminating and absorbingnew knowledge and putting it to good use. We will show a number of things. One is that thedifferences in productivity between British and French workers were sufficient to cast doubt on theassumption that unit labor costs in Britain were higher than in France. Another is that this higherquality of labor helps explain the British Industrial Revolution without having to rely on inducedinnovation. In this case the high wage is not the cause of invention, but a symptom of deeper factorsthat drive both wages and technological creativity.

A Simple Model of Human Capital and the Industrial Revolution

In what follows, we present the verbal and graphical outline of a simple dynamic model thatcaptures the main features of our view of the Industrial Revolution. The formal model may be foundin the Appendix to this paper, retrievable at http://www.ucd.ie/t4cms/WP13_12.pdf. The historicalreality the model reflected in the model is that technological ideas were generated by the IndustrialEnlightenment, which redirected research efforts toward more pragmatic purposes, and re-organizeduseful knowledge to make it more accessible (Mokyr, 2009). But turning this into an IndustrialRevolution required skilled and capable artisans who could build the new devices from blueprints,install, operate, and maintain them. These abilities took a large amount of training and adeptness,and we will refer to them as competence.

The importance of competence can be incorporated into a standard Phelps-Nelson growthmodel of human capital, in which productivity evolves as a function of human capital: specifically,there is some “maximum” level of attainable, and in each period the economy gets closer to it as afunction of its competence. Competence in the next period itself is a function of the existing stockof competence (reflecting the fact that artisans were trained by other artisans) and the investmenttheir parents make in their training (reflecting the facts that apprentices had to pay a fee to theirmaster and that health depended on food consumption). The growth in productivity A is a functionof past productivity and the level of competence in the economy. We then define a variable we termM (for “misery”), defined as the reciprocal of both health and competence.

The model then solves for two log-linear difference equations that follow the trajectories ofboth A and M over time. This will be recognized as adaptation of a linearized Lotka-Volterradynamic system of two competing species (Hofbauer and Sigmund, 1998, pp. 22-28). The two statevariables M and A can be seen as two competing “species” in a finite environment. The growth ofeach species is retarded by the presence of the other. Four possible equilibria are possible. One is thatconditions are so favorable to the first “species”, misery in our case, that its “population” will behigh regardless of the second species, which it always drives to its minimum level. This correspondsto the “Malthusian” (dismal) equilibrium, with population at the minimum of subsistence (maximumM), and A at its very minimum. The converse holds when A drives out M meaning that M isminimized (high levels of health and human capital). Two other equilibria are possible: if thespecies have little impact on each other both co-exist at positive levels; If they have a strong effect

6

on one another, it becomes indeterminate which of the two drives out the other, the outcome dependson initial conditions: whichever species initially has a sufficiently large population to dominate thesystem will drive the other out.

The model then posits two economies that we shall call France and Britain. Each faces thesame best-practice technological frontier A that rises through time, reflecting the progress of

~

Enlightenment scientific knowledge in Europe, which easily crossed national boundaries. France andEngland differ in only one way: initially disposable income is higher in Britain than in France. Thishistorical development is described in fig. 1. Our starting point, in panel (a), is a stark Malthusian

1world with little knowledge: log A is arbitrarily small and the knowledge isocline A lies completely~

below the two misery isoclines pertaining to both countries. As a result, both economies are at anequilibrium at the lower bound of knowledge. As time passes, best-practice technology A will rise

~

exogenously, reflecting the progress of Enlightenment useful knowledge, and this will be the drivingforce behind the model. At some point, the A-isocline rises enough to intersect with the Britishmisery-isocline but is still below the French one. This is depicted in panel (b). What happens thendepends on the parameters: under weak interaction Britain may start moving to an interior solutionat the intersection of the two; under strong interaction, the higher level of A only starts kicking in

3when the A isocline is entirely above it, as A in panel (c). At that time Britain jumps to a newat which it misery index is at minimum and its productivity is high, while the

~3equilibrium at log A

French remain in a Malthusian equilibrium until the A isocline has advanced sufficiently to make thetransition possible there as well (panel 4). Because English human capability is initially slightlyhigher than French, England can start to apply technological knowledge to production earlier, givingrise to a cumulative process of rising living standards, rising human capital, and improvingproduction technology. A gradual rise in knowledge above a critical level causes England toexperience an industrial revolution, while France for a while appears mired in age-old backwardness.

Note that we need not assume that Britain is originally richer than France: the French M-isocline would lie above the British one if Britain’s elasticity of converting knowledge intoproductivity was higher, or its ability to teach its apprentices was higher because the institutionsgoverning apprenticeship worked better, or the elasticity of output w.r.t. human capital were higher,or some combination of those.

7

This estimate is consistent with Arthur Young’s eighteenth century observations. Dividing the median costs4

of reaping an acre of wheat (60d) by the median harvest wage (20d-22d per day) on both Young’s southern and northern

circuits yields a rate just under three man days per acre (Young 1771, IV, 293-296; 1772). Young wrote that “Strength

depends on nourishment; and if this difference be admitted, an English workman ought to be able to do half as much

work again as a Frenchman” (Young, 1793, II, 315-316).

Fig. 1. Impact of rising technological frontier A on equilibrium in two economies with different~

misery isoclines.

Wages and Productivity in Eighteenth-century Britain and France

There is no dispute on the main fact underlying this debate: English wages were considerablyhigher than French ones on the eve of the Industrial Revolution. Allen (2009b, ch. 2) calculates thatthe real wages of building craftsmen in London in 1780 were 83 per cent higher than those in Paris,while those of laborers were 80 per cent higher. It is, however, invalid to conclude that English laborwas therefore expensive, until we compare productivity and can thus infer unit labor costs. Someindication of the differences in productivity can be attained from data in agriculture by comparingday rates and piece rates. The average time needed to reap an acre of wheat in early nineteenthcentury England was 2.9 man-days per acre, or 7.2 days per hectare (Clark, 1991, 449). This4

compares with France where the average cost ranged from 9.3 to 16.3 man-days per hectare, givingan average, weighted by regional output share, of 12.9 man-days per hectare (Grantham, 1991, 362).Reaping and threshing were manual activities with almost no capital input and fairly little skill. Even

8

allowing for considerable measurement error, the roughly 65-75 per cent productivity advantage forEnglish workers suggests a real difference in the physical quality of labor.

England France

Real Wages, 1780

Craftsmen 1.82 1.00

Laborers 1.80 1.00

Agricultural Output per man-day

Reaping 0.14 0.08

Threshing 1.54 0.93

Table 1:

Sources: Clark (1991, 449); (Grantham, 1991, 363).

The exact reason why British workers were more productive that French ones is yet to beresolved. It might be pointed out, however, that if income per capita affected labor productivity(instead of just the other way around), we are in an efficiency -wage world, in which employers willfind it in their interest to pay workers more than the lowest wage possible, because by paying ahigher wage they increase their productivity. They will continue to do so until the increase in laborproductivity is equal to the higher wage. A standard issue here is that coordination failure betweenemployers may undermine this equilibrium. An employer may want to pay his workers a higher wageto elicit more work out of them. If this efficiency wage engenders personal loyalty to the employerand thus reduces the effects of asymmetrical information, this could work fine. However, if it worksthrough a mechanism of improved worker strength and energy due to better nutrition or creates aninter-generational externality by improve the quality of workers available to the next generation offirms, other employers might free-ride on the higher wage, and a coordination failure would resultin a low-wage equilibrium. Arguably the British Poor Law could be seen as a attempt to preventlocal free-riding on improved worker quality.

Our argument, then, is that British workers were of higher quality than French ones. Thiswould not only explain their higher wages, but also provide a critical link that explains why Britishworkers were able to take advantage of the technological opportunities emerging in the eighteenthcentury. This is not a traditional human capital argument: as is well-known, in this period Britain ledEurope neither in the quality and quantity of its educational system nor in observed literacy rates.Instead of human capital in its conventional, narrow sense of rates of literacy and schooling, we wantto focus on the wider concept of what Heckman (2007) has termed human capability. Humancapability is the triad of cognitive skills, non-cognitive skills (for example self-control, perseverance,time preference, risk aversion, preference for leisure), and health. These components of human

9

capability in turn are strongly determined by the individual’s nutritional and disease environmentfrom conception to adolescence. Nutrition, Health and Physical Capability

Perhaps the most obvious source of difference between British workers and French workersis that the former seem to have been fed better. There is a fair amount of anecdotal evidence thatsuggests that for the bulk of the population, Britons were better fed than Frenchmen. That said,estimates of the exact gap differ quite a bit. Robert Fogel (2004) famously argued that Englishworkers, by being better fed than their French counterparts, were capable of more work, andestimated that the median French worker consumed about 2200 kcal per day, considerably less thana median English diet of about 2600 kcal. The amount of energy available for work (after the needsof basal metabolic demand) per capita in his estimate was about one-third higher in England thanin France: 600 kcals in France in 1785, against 812 kcals in England in 1750 and 858 kcals in 1800(pp 9-11). The more recent calculations in Roderick Floud et al. (2011, pp. 99) are similar and putthe English mean around 1800 at 2,456 kcal as opposed to the French mean of 1,847 (computed fromid., pp. 114–15); while Stephen Broadberry et al. (2011) estimate 2,100 kcal, more or less unchangedbetween the mid-thirteenth and mid-nineteenth centuries. At the other extreme, Craig Muldrew(2011, p. 156) estimates average calories per capita in England at 5,047 in 1770, falling to 3,977 in1800, although these estimates rely on implausibly high output of coarse grains. In the middle isAllen (2005) with an estimate of 3,800 kcal in 1750 falling to 2,900 in 1800.

The net effect of higher infant mortality on adult productivity depends, to some extent, onwhy infant mortality was so much higher in the first place. France's high infant mortality reflectedto some extent its lower standard of living and inferior diet probably had something to do with it.Mary Matossian (1984) has linked higher French death rates to greater consumption of the wrongkind of food, whereas Fogel (2004) and Bernard Harris et al. (2010) emphasize the link betweeninadequate food consumption — hunger — and “premature death.”

In terms of the quality of the diet, the data suggest a much higher percentage of animalprotein consumption in Britain than on the Continent. Muldrew’s claim (2011, p. 153) that Britishadult laborers consumed about 0.7 lbs of meat a day around 1770 may err on the high side, but Floudet al.’s estimates (2011, p. 210) of a per capita consumption of 4.9 oz in 1750 and 4.4 oz in 1800still compare favorably with Jean-Claude Toutain's estimates of France's per capita meatconsumption of 0.1 - 0.13 lbs per capita on the eve of the French Revolution. In Germany, too, meatconsumption was low (see Blum, 1974, pp. 413–15). Anecdotal evidence is abundant: manytravelers visiting Britain commented on British carnivorous habits. Thus B.L. de Muralt, a Swisstraveler, in 1726 noted that “the pleasures of the table in this happy nation” contained much roastbeef which is a favorite dish as well at the King’s table as at Tradesman”(Muralt, 1726, pp. 39-40).In 1748 Per Kalm, a Swede, similarly remarked that he does not believe that any Englishman “whois his own master, has ever eaten a meal without meat” (Kalm, 1892, p. 15).

10

A case could me made for assuming a bigger coefficient of variation. Villermé (18//) reports that in 1817 the5

average height of all those measured was 161.5 cm with 28 per cent below 157cm. That is consistent with a coefficient

of variation of 4.75 per cent.

Figure 2. English and French Adult Male Heights: Cohorts Born 1780-1815

The effects of better nutrition are most obviously visible in the differences in heights of adult

males. Figure 2 above describes the average heights of English male convicts and French army

recruits (Weir 1997: 191; Nicholas and Steckel 1991). Both sets of data refer to cohorts born

between 1780 and 1815, and neither is likely to suffer from the kind of selection bias that

compromises inferences drawn from the heights of recruits in volunteer armies (Mokyr and Ó Gráda

1996).

The English heights distinguish between urban and rural convicts. In Figure 2, fr reproduces

David Weir’s estimates, to which we have added 1 cm to reflect the fact that they refer to recruits

aged 20-21 years and that in societies that are malnourished, adult males do not reach their terminal

height till age 23. Weir’s estimates assume a coefficient of variation of 3.5 per cent in heights; fr04

assumes the coefficient of variation of 4 per cent implied by d’Angeville’s data for 1825--30. The5

comparison suggests that the gap between French and English heights on the eve of the Industrial

11

Assuming normality and a coefficient of variation of 4.75 per cent implies that the average height of accepted6

recruits was 165.1 cm. Inferring average population height from this figure using Weir’s assumption of a 3.5 per cent

coeffcient of variation gives a value of 163.8 cm, close to Weir’s reported estimate.

Revolution was considerable — about 5 centimeters. Moreover, if socially more representative data

for England were available (i.e. not just data on transported convicts, who came disproportionately

from poor backgrounds), the likelihood is that the gap would be somewhat wider still (compare

Fogel 2004, p. 13; Heyberger 2007). The gap for those born c. 1810-15 was lower but still

significant, 3-5 cm.

Other data confirm these gaps. For 1825-1829, Adolphe d’Angeville (1836, Table 3) reports

the average height of accepted recruits by administrative department, and the proportions rejected

because of height or fitness. Under normality, Angeville’s national average of 165.1 cm for accepted

recruits, and 16 per cent rejected for height is consistent with a population mean of 163.8 cm and a

coefficient of variation of 4 per cent. David Weir (1997) reports estimates of heights from 1804

onwards based on the sample of accepted recruits but assumes a coefficient of variation of only 3.5

per cent: the same as in modern western populations where the heights of the poor have more or less

converged on those of the rich. This low coefficient of variation gives a 0.4 cm increase in average

height for the late 1820s compared with our estimate; but a very large gap for 1817: Weir estimates

an average height of 163.2 cm compared with Louis-RenéVillermé’s reported value of 161.5 cm.6

In any event, all of those French estimates are substantially below the best British estimates that are

between 168 and 170 cm (Riley, 1994).

The significance of height gaps is that above all they serve as a canary in the coal mine: they

indicate that in childhood, much as in adulthood, the French were fed considerably more poorly than

the British. But height was also an indication of physical strength, as modern studies indicate. The

strength of a muscle is proportional to its cross section, which increases as the square of height as

empirical studies show. For example, a study of Indian female labourers implies an elasticity of

about two between height and grip strength, while a study of champion weight lifters found that

weight lifted “varied almost exactly with height squared” (Forde et al. 2000; see also Koley, Kaur

and Sandhu 2009). It is telling, perhaps, that contemporary scientists tried to measure differences in

physical strength and found that the strength of five Englishmen equaled that of a horse, as did the

12

strength of seven Dutchmen or Frenchmen (Desaguliers,1734–44, Vol. 1, p. 254). Daniel Defoe

noted that a French worker may well be more diligent than his English colleague, but “the English

Man shall do as much Business in the fewer hours as the Foreigner who sits longer at it” and added

that “the English Man’s work, according to his Wages, out-weigh the other; as his Beer is strong,

so is his Work; and as he gives more Strength of Sinews to his Strokes in the Loom, his Work is

firmer and faster, and carries a greater Substance with it” (Defoe, 1728, pp. 38, 40). Moreover,

childhood nutrition and health, which affect height, also had a strong effect on cognitive ability as

we will see below.

What we are really interested in, however, is how much height mattered for productivity.

There is no easy way to infer that information from eighteenth or nineteenth century data; but

modern data give us something of a clue: In a series of studies of the impact of height on wages

based on modern African and Brazilian individual-level data, T. Paul Schultz (2002, 2005) reckons

that every additional 1 cm. in height is associated with a gain in wage rates of “roughly 5-10

percent.” Wenshu Gao and Russell Smyth (2009), using contemporary urban Chinese wage data,

find that each additional centimeter of adult height is associated with wage gains of nearly 5 per cent

for males and 11 per cent for females. If a similar relationship between heights and productivity held

two centuries ago, then the 4 cm. gap in heights gap between Englishmen and Frenchmen at the time

implied a gap of 20-30 per cent in wage rates. This would account for a significant proportion —

though not all — of the gap in real wages. This finding also suggests that two centuries ago the

causation ran from nutrition and health to wages, and not just vice versa.

The other indicator of lower nutritional standards and lower child health is the difference in

infant mortality between the two countries. If life expectancy was significantly longer in Britain, this

was likely to reflect an overall better nutritional and health status; moreover, it might be correlated

with higher investment in human capital, because parents are more likely to invest in their children

to the extent that these had a better chance of surviving. According to the Cambridge Group family

0reconstitutions expectation of life at birth (hereafter e ) in England and Wales was 36.4 years in the

first half of the eighteenth century and 40.3 years in the second half (Wrigley et al. 1997, p. 295).

0In France in the 1740s e was about 25 years; between 1750 and 1789 it averaged 28.1 years. The

13

Moreover, in 1750 the proportions of the population living in cities with at least ten thousand inhabitants were7

16.7 per cent in England and 9.1 per cent in France; in 1800 they were 20.3 and 8.8 per cent (de Vries 1984: 39). Given

lower urban life expectancies, the gap between life spans in rural England and France must have been even higher than

reflected in Table 2.

Some of the English advantage may have been due to longer breast-feeding (Fildes, 1986, p. 106; McLaren,8

1990, p. 163). It could also possibly be in part due to a faster decline in smallpox due to the application of pre-Jenner

inoculation techniques, especially after the adoption of improved methods by Robert Sutton in the 1760s (Mokyr, 2009,

0data are reproduced in Table 5. Most of the gap between English and French e 's on the eve of the7

Industrial Revolution was due to the much higher survival rates of English infants and children, but

the gap for adults exists as well even if it is smaller.

Table 2: Life Expectancies in Eighteenth century England and France in the Eighteenth century

0 1 25e e e

England and

Wales

France England and

Wales

France England and

Wales

France

1740–49 37.3 24.8 46.2 34.0 34.5 31.3

1750–59 42.1 27.9 50.5 37.4 36.6 33.7

1760–69 39.0 27.7 47.2 37.4 34.4 33.8

1770–79 39.4 28.9 47.3 38.6 35.3 34.9

1780–89 39.2 27.8 47.4 37.4 33.9 33.5

Sources: England: Wrigley et al. (1997, 295, 224, 256, 291), France: Blayo (1975).

The significance of Table 2 to our argument is to show not only that life expectancy in Britain

was higher on the eve of the Industrial Revolution, but that apparently the damage of poor nutrition

played itself out primarily among the young. This may turn out to be highly significant in

determining the capabilities of the adult population, assuming that the selection effects (which

weeded out the weakest youngsters in France more ruthlessly) did not dominate the deleterious

effects of malnutrition on the surviving children. The height difference indicates that this was

probably not the case.8

14

pp. 244, 285).

Other data on infant mortality and disease confirms the importance of childhood nutrition.

For France, England and Sweden during the nineteenth century, Eileen Crimmins and Caleb Finch

(2006) find that childhood mortality rates, which reflect nutrition and environmental conditions, are

strongly inversely related with subsequent old age mortality and adult heights, which they attribute

to differing burdens of childhood infection and inflammation; while Carlos Bozzoli, Angus Deaton

and Climent Quintana- Domeque (2009) show that postneonatal (between one month and one year

after birth) mortality is a strong predictor of adult height in the US and Europe from 1950 to 1980.

In the public health literature for developing economies, César Victora et al. (2008) find a strong

connection between childhood malnutrition and shorter adult height, reduced schooling, and lowered

economic productivity; while Susan Walker et al. (2011) survey the biological mechanisms through

which stunting, iodine deficiency, and iron-deficiency anemia inhibit brain development in children.

Cognitive Effects and Skill Differences

Were British workers more productive because they were smarter than French workers? Until

recently, such a question would have met with outrage, but recent work establishing correlations

between height and various cognitive abilities points in this direction. Such a difference has nothing

to do with any inherent genetic or cultural differences, but a lot with nutrition and health. Since the

1960s a considerable body of literature has sought to identify and quantify the possible impact

between malnutrition in the form of protein, iron, and other nutritional deficiencies in infancy and

early childhood with weakened cognitive development (e.g. Scrimshaw and Gordon 1969;

Scrimshaw 1998). Analysis is complicated by measurement difficulties and the likely influence of

other variables correlated with malnutrition. In an early attempt at pinpointing the link between

nutrition and brain development, Martha Weidner Williams (1988) pointed to the crucial importance

of protein foods. Brain development in the first 18 months requires a number of amino acids and a

diet poor in protein foods can produce irreversible damage (as can a diet that is poor in carbohydrates

and forces the body to burn proteins). Modern nutrition research (e.g., Whaley et al., 2003; Heys et.

15

There is also an argument, made most strongly by Garrett Jones, that IQ correlates strongly with income per9

capita (Jones and Schneider, 2008, 2010).

al., 2010) has confirmed that higher consumption of animal-source food by children improves their

cognitive abilities.

The fundamental mechanism is that the same factors determining height also influenced

mental development. Anne Case and Christina Paxson (2008) find a strong connection between

height and cognitive ability in the US and Britain since the 1950s, with the strong impact of adult

height on earning disappearing when childhood cognitive ability is controlled for. As we have noted,

there is some reason to believe that British children had more access to meat than children on the

Continent. For industrializing England Jörg Baten, Dorothee Crayen and Hans-Joachim Voth (2013)

find that rising food prices are associated with lower numeracy for the cohorts born during food

scarcity, with numeracy measured by ability to recall one’s age. Their study suggests that high food

prices in Britain during the French and Napoleonic Wars led to nutritional deficiencies that resulted

in some kind of cognitive insult and which can be measured by their lack of numeracy decades

afterward. Although Baten, Crayen and Voth may be the first to establish an unambiguous

connection between nutrition and cognitive development in a historical environment, given much

contemporary evidence, their finding cannot be said to be a surprise.

We are, of course, unable to measure average IQ rates for eighteenth century societies. What

we know, however, is that IQ measurements are strongly affected by nutritional intake, both

quantitatively and qualitatively, that it is associated with measured height, and that height (the

output) and nutrition (the input) differed between France and Britain. This is far from saying that9

France was behind Britain in productivity because of these cognitive factors; there are profound

issues of endogeneity here that remain unresolved. Yet the evidence suggests that on the eve of the

Industrial Revolution French workers were in some definable ways less productive than British

workers, and hence the gap in wages may have different implications than the ones drawn by Allen.

Were British workers also better endowed with human capital? This is much more difficult

to document. Standard measures of schooling and literacy rates are hard to compare, as they are

measured using different techniques and at different times. Jaime Reis (2005) estimates mail adult

literacy in Britain at ca. 1800 at 60 percent for males and 40 for females, slightly below Northern

16

As early as 1690 , even Dutch travellers commented on the superiority of British artisans and their high level10

of skills from furniture design to the casting of metal rollers (Dobbs and Jacob, 1995, p. 74).

France (71 and 41 percent respectively), but above Southern France (44 and 17 percent). It is,

however, open to question whether literacy at this early stage of the Industrial Revolution mattered

a lot; highly literate regions in the Lutheran Baltic Scandinavia were latecomers to industrialization.

(Sandberg, 1979). David Mitch (1999) has specifically argued that Britain by the early nineteenth

century was, if anything, overeducated. School enrollment in the first half of the nineteenth century

was not all that impressive in Britain either. By 1830, 28 percent of the male population aged 5-14

years were enrolled in schools in England and Wales. The figure rose to 50 percent in 1850, but this

was significantly less than in Prussia where the percentages were respectively 70 percent in 1830 and

73 percent in 1850, and even behind France (39 percent and 51 percent) (Lindert, 2004, pp. 125-26).

As Deirdre McCloskey (2010, p. 162) notes, human capital so defined by itself had little effect: a

miner at the coalface may have to be skilled, but the hewer’s skill had nothing to do with formal

education and book learning. The same was true for skilled textile workers, construction laborers,

sailors, and so on. In a recent paper Sascha Becker, Eric Horning and Ludgar Woessner (2011)

establish that literacy mattered a great deal for “catching-up” but not for the generation of new

techniques, as was the case in the British Industrial Revolution. Standard human capital measures

do not really reflect much advantage to Britain and do not explain its precocity.

Instead, we want to focus on a different form of human capital, namely the idea of

competence introduced above. The basic idea is that technology, much like the performing arts, is

an implementable form of culture; much like music and theatre it takes one person to write the

original, but another to be “performed” — that is, carried out or executed by competent individuals.

Those skills, however, do not necessarily include creativity and originality. Britain and France could

both count on a considerable supply of original genius as attested by the fact that a substantial

number of the great inventions made during the Industrial Revolution originated in France even if

they were first implemented on a large scale in Britain. Britain had an advantage in skilled artisans,

what Meisenzahl and Mokyr have terms “implementer and tweakers”. This was surely something

that historians and contemporaries were convinced of. A French visitor in 1704 noted that the10

English were “wanting in industry excepting mechanicks wherein they are, of all nations, the greatest

17

Alfred Marshall in his Industry and Trade (1919, p. 62) asserted that “The English inventor ... could afford11

to sink capital in experiments more easily that they [Germans and Frenchmen] could. For he had access to a great variety

of highly skilled artisans, with a growing stock of engines... every experiment cost him less, and it was executed more

quickly and far more truly than it could have been anywhere else.”

improvers” (cited by Hollister-Short, 1976, p. 159). The idea that the British were above all good

imitators thanks to their skilled labor force was reiterated by none less than David Hume, who

opined that “every improvement which we have made [in the past two centuries] has arisen from

our imitation of foreigners ... Notwithstanding the advanced state of our manufacturers, we daily

adopt, in every art, the inventions and improvements of our neighbours” (Hume, [1777], 1985, p.

328). Other such quotes can be found (Mokyr, 2009, pp. 107–08) and for a while it became

something of a consensus amongst British economists to attribute the country’s technological

leadership to its advantage in skills. But is there systematic evidence to back up contemporary11

observations?

One piece of evidence that suggests that Britain collected some kind of rent from her higher

level of skills is that the mercantilist policy makers of the eighteenth century felt that the exportation

of machinery and the emigration of skilled artisans endangered these rents. The laws that prohibited

the emigration of artisans and the exportation of machinery were first passed in 1696, and repeatedly

amended in the eighteenth century. They remained on the books till the mid 1820s, although

enforcement was at best spotty ( 1977). The illegal export of machinery, for instance, was almost

impossible to prevent; after all customs officers lacked the technical expertise and the staff to inspect

large cargoes (Jeremy, 1981, p. 41). By the early nineteenth century the laws against machinery

exportation were weakened and after 1815 barely enforced at all. All the same, they reflect a clear-

cut view of what advantage Britain enjoyed in comparison with its main competitors. This view was

shared by Continental nations, who throughout the period sent a variety of industrial spies to Britain

to try to transfer its expertise to the Continent (Harris, 1998).

Decisive evidence on the relative quality of English workers comes from the direction of

labor migration. If the expensive English labour hypothesis were true, we would expect the flow to

have been from France to England, in the form of Continental workers taking advantage of higher

English wages. In fact, the flow was in the opposite direction, and composed of English and Scottish

skilled artisans. Interestingly, this flow of artisans to France precedes the Industrial Revolution,

18

In 1841 a witness testified that in Liège Mr Cockerill, who had 2,000 men in his employ, “many of them12

Scotch and English” (Great Britain, 1841, p. 20). Another 1841 witness reiterated that if five workmen were employed

under identical circumstances in England and France, the English workers would do more work; the labor in England

being more productive than in any other country (ibid., pp. 27–28). Even in Belgium, where the quality of artisans was

widely regarded as high, British engineers who worked there assured the members of the committee that “our artisans

are a great deal superior than those in Belgium” (ibid., p. 53).

implying that the advantage that England enjoyed in the area of technical competence predated its

technological achievements. Thus, for instance, John Holker, an English mechanic and political

refugee in France, set up a textile manufacturing plant in 1752 and, despite the risks as a Jacobite

refugee, returned to recruit many of his skilled workers in Britain. By 1754 he employed twenty

English artisans who were allocated among French workers so that skills could be disseminated in

the most effective fashion (Henderson, 1954, p. 16; Harris, 1998, p. 60). The Industrial Revolution

strengthened this connection and, after 1815, a large number of British technicians found their way

to the Continent, where they installed, maintained, and managed new equipment and instructed local

workers how to use it. Such an advantage was to some extent fleeting: as a French memorandum

of the late 1780s pointed out, when English experts and workmen had come over in recent times, the

French soon became keen to emulate them in the machine and hand tools they used (Harris, 1998,

p. 413). As Robert Fox has observed (1984, p. 142–3), the French learned quickly, and as soon as

local workmen had acquired the basic skills, the senior British operative became more of a rarity.

But the technology itself was changing rapidly, and the flow of emigrants had to continue until deep

into the nineteenth century to work with more recent vintages of machinery.

How big were these flows? The laws prohibiting emigration resulted in a Parliamentary

investigation, which has yielded a rich if largely anecdotal and impressionistic body of evidence

supporting the size of the flow due to the higher quality of British labor. A Mr. Alexander testifying

in estimated that in the years 1822 and 1823 alone, 16,000 artisans moved from England to France

( Great Britain,1824, p. 108). This figure seems exaggerated; a year later an engineer named

Alexander Galloway estimated the stock of English workers in France at 15,000-20,000 workers

(Great Britain, 1825, pp. 37, 43). In 1830, a report cited the number of English living in France at12

35,695 of whom 6,680 were “mechanics” (Society for the Diffusion of Useful Knowledge, 1830, p.

217). Allowing for other skilled workers, this estimate seems to be in the right order of magnitude.

Why they were there was quite clear: they were paid more. Thus it was maintained that an English

19

Similarly, a British engineer working in Belgium recounted in 1841 that he had hired an Englishman at 1213

francs 50 cents, and a Belgian at 7-8 francs “and the 12.50 man was a great deal the cheapest” (Great Britain, 1841, p.

53).

These numbers, of course, are anything but hard — the same witness (Adam Young) testified a few minutes14

later that “with one Englishmen I could have done more than with those eight Frenchmen.”

engineer, turner, or iron founder, working in France, will make twice as much as a French one. “The

English workmen, from their better methods, do more work and better than the French...and though

their wages are higher, yet their work does not cost more money in France than when done by

Frenchmen, though their wages are lower” (Great Britain, 1824, p. 106). The great inventor and13

mechanical genius Bryan Donkin noted that a worker in the paper industry who might have made

18-20 shillings a week in Britain, was hired at 50 shillings in France. Galloway felt that a person

of similar qualifications would make 22 shillings in Paris and 36 shillings in London — but then

added that English workmen in Paris would make twice what the locals would make (2 guineas),

indicating the difference in the perceived quality of the workmen (Great Britain, 1824, p. 24). John

Martineau testified similarly (ibid., p. 7) that a French blacksmith would make in France 4 francs a

day, while an English smith in Paris would make 10– 11francs. Clearly, the much higher wages

secured by skilled British workmen on the Continent is a reflection of the different scarcities.

Another witness who had spent time working in Alsace recounted that the British machine-maker

Job Dixon had to send to England for experts to set up the spinning machinery he had made. “Our

spinners,” he added, will do as much in six hours as theirs in twelve (ibid., p. 580).14

Early Continental adoption of the new techniques needed British skilled workmen in its early

stages. Philip Taylor, an engineer, pointed out that in Wurzburg, establishment of manufacturing ran

into great difficulties, because “things that would have come to the hands of workmen in this country

instantly, were with great difficulty obtained” (p. 34). In 1841, Grenville Withers, an engineer

residing in Liège, testified that he had some self-actors at Verviers made by Sharpe and Roberts, the

best he could find, and installed the same way as in Manchester, yet productivity was only two-thirds

what he could get in Manchester (Great Britain, 1841, p. 80). Clearly, the superior quality of English

artisans, the complementarity of skilled workmen and machinery made or designed in Britain, and

20

Withers attributed this difference to the comparative lack of dexterity among Belgian workmen, and their15

“nonchalance” and claimed that “as you place Belgian workers with English workers, they need the supervision — as

soon as the British workers leave, the local workers fall back on their old ways.”

The impression gained from uncertain data, not always easily to interpret, is of two Frances: one of low wages16

and payments in kind in the northwest, south, and southwest, and another of middling or high wages in the north

(dominated by Paris and the Normandy region), and even the centre… The north — with its combination of high wages,

steady employment, and low grain prices — seems clearly privileged (Crébouw 1986: 733-39; our translation).

the need to teach local workers, implied continuing migration of skilled workmen. The higher15

competence of British workers is confirmed by the reverse flow of trained Continental engineers who

came to study with or spy on British engineers. Among the many Germans who came to Britain to

acquire technical expertise, we can mention Wilhem von Reden, sent to study British coal mining

techniques in 1776; Johann Gottfried Brügelmann who traveled to study Arkwright’s famous

Cromford mill in 1794, before setting up his own mill near Düsseldorf; F.A.J. Egells, a Westphalian

locksmith sent by the Prussian government to England in 1819 to study machinery engineering;

Jacob Mayer, who worked for a time at Sheffield before opening a cast-steel mill near Cologne, and

quite a few others (Henderson, 1954, ch. IV).

A cross-sectional analysis

Wages differed not just between England and France; they also differed significantly within

both countries. However, the gaps between wages in the regions of France were much greater

(Chanut et al. 1995). Yvonne Crébouw’s analysis of official surveys conducted in the 1790s and

1800s suggests that interregional wage gaps across France were then considerable. While in the16

départements of Eure or Seine-Inférieure in c. 1790 a worker might have earned enough to buy a

quintal of wheat in what he or she earned in 6 to 6.5 days, in the Breton départements of Morbihan

or Ile-et-Vilaine it would have taken double that (Crébouw 1986, p. 740). In 1840, when data by

département become available, agricultural wages in Breton départements were only sixty per cent

the national average, whereas in the départements surrounding Paris they were one-quarter above

the national average. Such gaps exceeded those found in industrializing Britain (Chanut et al. 1995;

Hunt 1986, pp. 965-66).

The internal variation within France and the availability of data by département is available

21

can be utilized to test our hypothesis. Some of George Grantham’s estimates are summarized in

Tables 3A and 3B. They show that, calculated in terms of man-days per hectare, labor productivity

in c. 1800 was highest in the Champagne, Lorraine, and Nord regions and lowest in Brittany and the

West. One would expect workers in the former regions to have been taller and more productive than

in the latter areas. Were they?

TABLE 3A. HARVEST AND THRESHING COSTS IN MAN-DAYS PER ACRE: WHEAT c. 1800Region Pre-harvest

(light)

Pre-harvest

(stiff)

Manuring Harvest Threshing Total

(light)

Total

(stiff)Paris 24.7 13.6 7.4 12.9 13.5 58.5 47.4West 31.5 18.0 3.5 14.0 12.5 61.5 48

Bretagne 33.5 20.0 4.7 16.3 15.0 69.5 56Berri 32.0 18.5 3.0 13.8 11.25 60.05 46.55

Champagne 17.5 10.0 4.0 13.0 9.0 43.5 36Lorraine 18.5 10.5 4.0 13.0 9.0 44.5 36.5

Nord 11.9 7.1 9.0 9.3 15.3 45.5 40.7Note: Threshing costs estimated by multiplying yield by man-days per hectolitre

TABLE 3B. Cost per hectare and per hectolitre: wheat in man-days c. 1800Cost per hectare Cost per hectolitre

Region Light Stiff Light StiffParis 58.5 47.4 3.01 3.63West 61.5 48 5.17 6.67

Brittany 69.5 56 4.57 5.49Berry 60.05 46.55 5.05 6.50

Champagne 43.5 36 3.48 4.19Lorraine 44.5 36.5 3.08 3.69

North 45.5 40.7 2.34 2.62

Source: Table 3(a); Grantham 1993: 483

Data by département on the average height of conscripts recruited between 1819 and 1826

are provided by Jean-Paul Aron et al. (1972, pp. 92-93). We can use these to look at the connection

between height and wages, though of course the complex causal relation between the two cannot be

identified. Still, the strong correlation between the two suggests that British high wages should not

be seen as the cause of high labor costs, because high wages were overall associated with high labor

productivity.

22

“Iodine deficiency: way to go yet”, The Lancet, 372, no. 9633 (July 2008), p. 88 [http://www.thelancet.com/17

journals/lancet/article/PIIS0140-6736(08)61009-0/fulltext]. Feyrer, Politi and Weil (2013) have found that adding iodine

to cooking salt adds significantly to measured IQ and may well be responsible for a considerable part of the secular rise

in IQ known as the Flynn effect.

Based on data generously provided to us by Joachim Voth (see Baten, Crayen and Voth, 2012 for details.)18

Table 4:Correlations between height and measures of labour productivity (seven farming regionsAverage height Percentage ‘small’

Light Stiff Light StiffPre-harvest -.846 -.812 .847 .810

Hectare -.780 -.732 .817 .771Hectolitre -.851 -.885 .857 .891

Sources: Grantham 1993; Aron et al. 1972: 86-87, 92-93.

More detailed departmental data on France in the mid nineteenth century indicate a strongcorrelation between height (and other measures of physical well-being) and productivity or wage.As Table 4 shows, estimates relating wages and agricultural productivity (measured as wheat yieldper ha divided by man days per ha.) in 1852 show that the two are not only highly correlated butthat they are by and large determined by the same variables: both are clearly positively influence byfactors determining physical well being and by literacy. Urbanization, which is a proxy for Allen’sargument about high wages in Britain is also a factor (as would be expected), but the standard humanquality still affect wages and productivity holding urbanization constant. We include the onlyvariable found in the data that is related to nutrition, namely “goitre” – the percentage soldiersrejected from military service because they suffered from goitre, caused by iodine deficiency. Iodinedeficiency is also associated with reduced mental capability.17

Similar data for Britain for the nineteenth century are harder to come by, but the little thereis confirms our hypothesis that there is a positive association between high wages and some measureof labor quality. One measure of human capital that seems to have withstood the test of time is anindex of age-heaping, which tends to be higher among less numerate and educated populations. Inthe table below we produce some cross-sectional results for England at the county level. As ourdependent variable we use the wage level at the county level as reported by Hunt (1986), thoughthese are agricultural wages. The independent variables are a variety of measures of “human quality.”They include the literacy rate by county adapted from convict data (Nicholas and Nicholas, 1992, p.11) and two measures of nineteenth century age-heaping (Whipple indexes). We also utilize the18

data on the “quality of diet” developed recently by Sara Horrell and Deborah Oxley (2012) andBritish army height data using the standard source based on the work of Floud, Kenneth Wachter andAnnabelle Gregory. All those data are flawed to some extent, yet they are consistent with thehypothesis that wages were associated with a higher “quality” of the average worker (although it isimpossible to disentangle the exact causal relation with the data at hand). The results for the 1760wage data are obviously weak, with both the height and the nutrition variables having the wrongsigns. For the 1790 and 1840 wages, the signs are more reasonable and perhaps most encouragingly,the wages are thoroughly negatively correlated with the degree of age-heaping (which reflects to

23

some degree numeracy education and to some degree innate cognitive ability). All in all, the county-level regressions need more work, and in particular a better measure of the dependent variable.

Table 4: Regressing 1852 wages in France on measures of labor quality.( t-stats in parentheses)

dependentvariable

Wage, 1852 Wage, 1852 Wage, 1852 Wage, 1852 Wage, 1852

Constant -20.39(-5.32)

111.7(12.83)

-1.316.5(-2.45

-1,445.0(-3.76)

102.3(13.02)

Height 1,322.2(5.73)

873.12.65

954.2(4.11)

Literacy .867(5.41)

.438(1.96)

.799(5.34)

urban .880(3.96)

.932(4.63)

goitre -6.418(-2.24)

n 86 85 85 86 81

adjusted R 0.272 0.252 0.303 0.38 0.4552

dependentvariable

agriculturalproductivity 1852

agriculturalproductivity1852

agriculturalproductivity 1852

agriculturalproductivity 1852

agriculturalproductivity 1852

Constant -10.72(-5.49)

.241(5.85)

-3.99(-1.53)

-10.12(-4.76)

.233(5.55)

Height 6.76(5.75)

2.59(1.62)

6.39(4.97)

Literacy .0052(6.88)

.00395(3.63)

.00546(6.84)

urban .00088(0.72)

goitre -.0348(-2.40)

n 86 85 85 86 81

adjusted R 0.274 0.356 0.368 0.27 0.4532

24

Table 5: cross sectional correlations, England (s.e.’s in parentheses)

wage 1760 wage 1790 wage 1840

Height -3.78a

(4.02)6.92a

(5.07)6.48b

(5.56)

Nutrition -2.72c

(.903)1.71c

(1.14)1.41d

(1.36)

Whipple -.966(.41)

-.669(.514)

-1.59(.58)

Literacy -.05(.20)

.13(.25)

-.05(.27)

constant 472(276)

-295(348)

-149(402)

n 35 35 37

R .42 .30 .252

a 1788-1805 averageb 1824-44 averagec 1797d 1834

The sources of Britain’s high quality labor

Yet the account above may not solve the problem of British precocity as much as push itback. We need to know more about the “deeper” sources of British higher labor productivity beforethe Industrial Revolution. We must separate the underlying causes of better nutrition, leading tobetter health, strength and cognitive ability, and those institutions that created the highly skilledartisans. Better nutrition in Britain was surely the result of its higher agricultural productivity, whichhas been abundantly documented. The debate today is between those who believe that there was anagricultural revolution in the eighteenth century (such as Mark Overton), and those who maintain thatBritish agriculture was already quite advanced and productive before 1700 (including Robert Allen).For the purposes of our argument this matters little, since all we need is that British agriculture was

25

The calculation is as follows: for France, c. 1785: (Fogel 2004: 9) estimates a consumption of 1,848 Kcals19

per head. The agricultural labor force is estimated at 61.1 percent of the population (Broadberry 2011: Table 8). These

numbers imply an output of roughly 3,020 Kcals per agricultural worker per day. For Britain the calculation is for c.

1750. Kelly and Ó Gráda (2013) estimate British caloric intake per capita at Kcals per head at 3,150 kcals, which, with

an agricultural labor force participation at 36.8 percent (Broadberry, 2011), implies an output of 8,560 Kcals per worker,

a productivity gap of 2.83:1. The actual food supply gap is much smaller, as England had proportionally 40 percent fewer

workers in agriculture.

better able to feed its population than most Continental countries. The adoption of convertiblehusbandry, and the successful breeding of bigger and fatter animals surely increased the supply ofhigh-protein foods. The exact size of the gap between Britain and France is hard to ascertain, giventhe fragile data and the strong assumptions needed. Allen’s own data imply a ratio of 0.58 to 1between France and England (Dennison and Simpson, 2010, p. 150), whereas Liam Brunt (2006 p.15) suggests a ratio of 4.3: 1 in favor of Britain. Computing caloric output per worker, showsEngland and Wales to have an advantage of slightly better than 2:1. A highly productive agriculture19

was supplemented by its ability to import food, not just Baltic grains in time of harvest failure, butalso a substantial amount of pork from Ireland (Thomas, 1985).

Moreover, access to food in Britain was more equally distributed than in other countries.Whether income distribution in Britain was indeed less unequal on the eve of the IndustrialRevolution, it is clear that it had one institution in place that made sure that the worst dangers ofmalnutrition would be cushioned: the English Poor Law, a unique institution in preindustrialEuropean economic history. The possibility that the Poor Law had a salubrious effect on theIndustrial Revolution was already suggested by Solar (1995). More recent work (Kelly and Ó Gráda,2012; Greif and Iyigun, 2013) through a number of mechanisms, have expanded on this suggestion.They suggest, among others, that the Poor Law weakened the Malthusian mechanisms, reducedpopulation growth and diminished rural unrest. The dimension we are adding here is straightforward:the Poor Law helped create a higher quality labor force by making food more accessible to those whoneeded it most. Economic logic suggests that a small reduction in the inequality of incomedistribution would reduce inequality of access to food more than proportionally. Moreover, the PoorLaw provided a modicum of education and training even to lads whose parents could not afford theoften steep fees for apprentices through parish (or pauper) apprenticeships. While in the past pauperapprenticeship has been regarded as exploitative, recent research as taken a somewhat more favorableview of the institution (Humphries, 2010, pp. 295-304). While it rarely provided a very thoroughtraining on the order of private apprenticeship, it provided in many cases a pathway toward usefulemployment.

Access to food and the Poor Law may have shifted the entire distribution of labor quality tothe right, but cannot explain the unusual quality of the British skilled artisans. The main source ofEnglish high level of technical competence lay in its system of professional training throughapprenticeship: in 1700 over a quarter of males aged 21 had completed an apprenticeship (Mokyr,2009, 118). As noted earlier, the English school system was not impressive by contemporarystandards. However, the decisive group during the Industrial Revolution was artisans, and nearly allartisans were trained as apprentices by other artisans. The question is why the English system ofapprenticeship worked better than elsewhere.

26

The traditional, negative view of European guilds is disputed by Epstein (1998) but defended by Ogilvie20

(2008).

The importance of a successful system in which artisanal skills were transmitted and acquiredcannot be overrated. We should keep in mind that much of useful knowledge imparted on young ladswas tacit knowledge, that could not be obtained from textbooks or encyclopedias. This wasespecially true for the coal-using industry such as iron, where experience and what John R. Harris(1992, p. 33) called “unanalyzable pieces of expertise” and “the knacks of the trade” were especiallyimportant. But basically apprenticeship was at the core of human capital formation before theIndustrial Revolution everywhere. Not all apprenticeships were the same, given that we deal with aninstitution that survived for centuries in many countries and trades. In some cases apprentices wouldlive with their masters, becoming part of the household and were committed to obey and respect himlike a father. The training would be more than technical aptitude, it involved the many mysteries and“secrets” of the trade (Farr, 2000, p. 34). The training took place through “observation, imitation andpractice” over many years, during which acquiring human capital and providing labor services werejointly carried out (Wallis, 2008, p. 849). For a variety of reasons the institution of apprenticeshipfunctioned better in Britain than elsewhere. It did so despite being largely an informal institution, thatis, with little third party enforcement, although it operated “in the shadow of the law” and there wasat least the possibility of going to court if all else failed, though such cases were rare.

In her work on childhood labor and training, Humphries (2003; 2010, 282- 283) stresses that,unlike across much of the Continent, apprenticeship in England was not normally enforced andmonitored by a guild with coercive powers. Instead, it was largely a self-enforcing institution in a20

repeated-interaction framework, relying on the capability of local networks based on kin, religion,and personal connections to create reputation effects that made the majority of both masters andpupils cooperate at a reasonable level even when the contracts themselves were less than complete.This is especially true for the mechanical engineering profession, which, together with clock- andinstrument makers, millwrights, ironmongers, and colliers, provided a great deal of the inventive andtechnical competence of the British Industrial Revolution. In mechanical engineering, as ChristineMacLeod and Alessandro Nuvolari (2009) have shown, would-be apprentices selected from a smallnumber of closely connected firms for their training.

The 1563 Statute that formally prohibited craftsmen to carry out their trade withoutcompleting their apprenticeship was not uniformly enforced, and after its final repeal in 1814,apprenticeship remained the main form for boys to acquire a professional training. Moreover, anexamination of a large sample of indentures (formal contracts between masters and apprentices)reveals a substantial increase in the number of apprentices in mechanical and machine-relatedoccupations in the early stages of the Industrial Revolution (Van der Beek, 2010). This system ofproducing human capital was effective and adaptive and worked well as long as the importance offormal schooling remained limited. It remained largely a private order institution, very much part ofa British institutional structure that stood at the center of its success in the early stages of theIndustrial Revolution This institutional structure represented a “civil economy,” one in whichcooperative arrangements between individuals based on shared cultural norms and reputationmechanisms led to outcomes that elsewhere required direct state intervention. Beside theapprenticeship system, eighteenth-century Britain took advantage of close networking among

27

Given this system, most of Britain’s skilled workers were hardly intellectuals, and even someof its most accomplished engineers and inventors often regretted their lack of formal education.James Watt, famously, was educated at a good grammar school but never had a formal educationbeyond that (though he networked with some of the best scientists at Glasgow University). JohnSmeaton, Watt’s rival for the position of the best engineer of the age, was also largely self-taught inthe art of what was known at the time as “philosophical instruments,” though he, too, cultivatedfriendships and correspondences with people from whom he felt he could learn (Skempton, 2002,p. 619). To be sure, Smeaton made a number of important scientific contributions. GeorgeStephenson was entirely self-trained in engineering skills and learned to read and write at ageeighteen. His equally accomplished contemporary, Richard Roberts (inventor of the self-acting mule,among others), was in the understated description of one authority, “more interested in making thingsthan learning about them” (Hills, 2002, p. 9). The kind of brilliant tinkerer with little formaleducation but with excellent mechanical intuition, good hands, and a quick mind did not dominatethe technological stage for long, but while it lasted, he goes a long way towards explaining Britain’sprecocity.

28

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